Hog futures headed for a fourth straight weekly gain, the longest rally since November 2011, on speculation that demand for animals will rise as winter weather disrupts supplies. Cattle fell.
Parts of southwest to northeast Iowa received 4 inches (10 centimeters) to 8 inches of snow earlier this week, Joel Widenor, a vice president for Commodity Weather Group LLC in Bethesda, Maryland, said in a telephone interview. Temperatures fell to minus 5 degrees Fahrenheit (minus 21 Celsius) to minus 10 degrees today, he said. The National Weather Service has issued wind chill advisories for northeastern Iowa.
“We had snowfall and ice across the western Corn Belt, and now we’ve got subzero temperatures,” Doug Houghton, an analyst at Brock Associates, said in a telephone interview from Milwaukee. “There are probably less hogs moving to market, which is creating enough supply tightness to force competition here.”
Hog futures for April settlement climbed 0.4 percent to 89.675 cents a pound at 11 a.m. on the Chicago Mercantile Exchange. A close at that price would be a 0.8 percent weekly gain.
Cash hogs rose 2.4 percent yesterday to 86.33 cents a pound, the highest since Aug. 14, and wholesale pork fell 0.5 percent to 85.04 cents a pound, a one-week low, U.S. Department of Agriculture data show. That signals that packers are losing money, which may slow their purchases and curb the price rally, Houghton said.
Cattle futures for April delivery dropped 0.3 percent to $1.3245 a pound in Chicago. Prices rallied 0.4 percent in January, the fourth straight monthly gain.
Feeder-cattle futures for March settlement slid 0.3 percent to $1.49075 a pound on the CME. Prices fell 3.1 percent last month, the biggest decline since July.
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